BRIEFING: Cambodia 'waking up' to development

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PHNOM PENH, Cambodia (AP) An old hospital was razed to make way for Phnom Penh's tallest building — a 42-story twin condominium tower. A garbage-strewn slum became prime real estate after police evicted its residents to a parched rice field outside the capital.

Cambodia is experiencing a construction boom fueled by foreign investment, particularly by South Koreans, and buying and selling among the country's few nouveau riche — while leaving the poor majority behind.

Shopping malls and tall apartment buildings are sprouting up, transforming the capital's landscape that once bore the charm of colonial French-style villas but resembled a ghost town at the fall of the genocidal Khmer Rouge regime nearly 30 years ago.

Political stability and robust economic growth of nearly 10 percent have lured investors to the real estate market that has seen prices surge in the past few years — although they are still lower than in neighboring Vietnam or Thailand.

"Cambodia was sleeping for many years, and now it's waking up," said Claire Brown, managing director of Britain-based Claire Brown Realty, who began buying and selling property in Phnom Penh two years ago.

"Everybody wants to get a piece of the action," she said by phone. "The time to get in is now because soon it's going to be too late."

Prime city land prices have tripled in the past two years to $279 per square foot. Those kinds of returns have drawn rich and middle-class Cambodians, as well as those living abroad.

"In buying and selling land, they could get profit 100 or 200 percent a year, if they make the right bet on the right location," said Dith Channa, the sales manager of CPL Cambodia Properties Ltd., a Phnom Penh-based real estate agency.

The soaring real estate market is also widening the gap between rich and poor, however.

"Phnom Penh city is getting modern every day — of course for the wealthy," said Chhorn Et, a former slum dweller now living with hundreds of others in a village in the middle of rice field about 12 miles from the capital.